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Bitcoin Stalls Under $23K Ahead of MT. Gox Token Unlock


Bitcoin Stalls Under $23K Ahead of MT. Gox Token Unlock
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YEREVAN (CoinChapter.com) – Bitcoin partially pared its year-to-date gains, dropping 10% since peaking at $25,000 on Feb 22. As a result, the flagship crypto stood at just over $22,400 on March 7, after stalling at the said level for three previous days.

Bitcoin (BTC) daily chart. Source: tradingView.com

Meanwhile, creditors of Japan-based crypto exchange Mt. Gox, closed on criminal charges in 2014, are about to recover some of their Bitcoin following a nearly decade-long liquidation process. The upcoming token release raised concerns that large amounts of BTC might leak, dropping the price.

As the MT. Gox controversy unfolded nearly a decade ago, a small recap is in order.

MT. Gox token release – why is it important?

The exchange launched in 2010 in Tokyo, Japan. By 2014 it was handling over 70% of all Bitcoin transactions worldwide.

However, MT. Gox abruptly ceased operations amid revelations of its involvement in the loss/theft of 850,000 BTC. Notably, BTC/USD exchange rate stood at approximately $800 at the time, but after the scandal slumped to $200 by the end of 2014.

In February 2014, Mt. Gox suspended trading, closed its website and exchange service, and filed for bankruptcy protection from creditors, starting liquidation proceedings in April. The 850,000 bitcoins in question have since been “found,” but the reasons for the initial disappearance were allegedly theft, fraud, mismanagement, or a combination of these.

As a result, investors have not seen their funds since the bankruptcy. Nevertheless, the civil rehabilitation trial surrounding the exchange has ended. Payouts to creditors are scheduled to begin this Friday, Mar 10.

As of Mar 7, the Mt. Gox cold wallet contained nearly 140,000 BTC, worth over $3 billion.

$3 billion worth of BTC remains on the MT. Gox cold wallet. Source: token.unlocks.app

Also read: Bitcoin Week Ahead Ep24: Powell Testimony, Jobs Data, and a BTC Price Crash Below $20K.

Will the BTC supply strangle the demand?

Any token unlock typically increases selloff risks in the market if the demand drops simultaneously. Thus, the magnitude of a possible $3 billion bitcoin payout can tank the BTC price if the MT. Gox creditors decide to sell their newly-received Bitcoin.

Meanwhile, Mt. Gox trustee, Nobuaki Kobayashi, has asked creditors to select a repayment method, register payee information online and indicate how they want to receive their repayments. Blockstream CEO Adam Back, an Mt. Gox creditor, commented on the matter without referring to his plan concerning the funds.

Well, for myself, I had pretty much written off the Bitcoin I still had on Mt. Gox in 2014 as a loss, so philosophically anything I get back now is a bonus to cold store. It has stretched on for many more years than anyone expected, and so it will be welcome I am sure by any creditors to finally get paid

he said.

Strategists believe a BTC price drop is unlikely.

Meanwhile, UBS bank strategists believe that the release is not likely to wreak havoc on the bitcoin market, as many of the MT. Gox creditors are “probably still crypto believers.” The strategists noted that two of the largest creditors, with a combined share of claims of 20%, have opted for the crypto payout.

New supply could still come to the market, but this at least implies it would be less concentrated. Such news could have been an additional factor for BTC’s surprising resilience of late.

commented UBS.

However, the market is already facing resilient headwinds, such as the Fed’s continuous interest rate hikes and the problems at crypto-friendly Silvergate bank. In detail, Silvergate’s stock (NASDAQ: SI) plunged 95% throughout 2022 after regulatory scrutiny. Thus, the BTC token release on Mar 10 will shed more light on the possible market fluctuations.

Also read: Bitcoin (BTC) Price Crashes To $22,000 But Why The Bulls Are Not Done Yet.

Click here to keep up with the ever-changing crypto market and never miss the scoop!

The post Bitcoin Stalls Under $23K Ahead of MT. Gox Token Unlock appeared first on CoinChapter.



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